Published: March 12, 2008 01:15 am      

Budget committee addresses prisons, passes budget and cigarette tax

See related story links at right for details about the prisons and where the money would be spent

Some of them were “squirming in their seats,” but 20 members of the House Appropriations and Revenue Committee chose higher cigarette taxes and sales taxes on some services over “devastating” cuts to education and health and human services Tuesday.

The committee voted for a revenue package that raises $400 million in new revenue in each of the next two years to avoid cuts to universities and human services and provides school teacher raises of 1 percent in the first year and 3 percent in the second of the next biennium.

The final vote on the revenue package was 20-9. The budget, based on the revenue package, passed unanimously afterward.

“What we’ve endeavored to do is restore some of the most devastating cuts” in Gov. Steve Beshear’s original budget proposal, said committee chairman Harry Moberly, D-Richmond. “It won’t be a great budget. It won’t even be a good budget, but it will allow us to restore cuts so we have a budget we can live with for the next two years.”

The revenue package is essentially the same one Moberly revealed Friday after a meeting of the House Democratic caucus with Beshear who wanted lawmakers to raise the cigarette tax by 70 cents. Instead, the package passed out of committee Tuesday raises it 25 cents, extends the sales tax to some luxury services, and refinances existing state debt. The only difference is $20 million more from lapsed state debt and operating efficiencies.

The money will restore a number of funding cuts for the state’s universities’ base funding, for non-Medicaid health services, provide teacher salary increases, provide extra SEEK money for schools to cover additional costs of teacher raises for those with longer tenure and higher rank, and provide an additional $55 million for the Bucks for Brains.

The budget also includes $500 million in bonding of road projects. That will be financed by freezing 1.4 cents of a 1.5-cent, automatic increase in the gasoline tax which goes into effect July 1. Theoretically, that tax could decrease if wholesale gas prices fell substantially – but that’s almost certain not to happen.

By codifying the 1.4 cents, said Rep. Don Pasley, D-Winchester, who chairs the Transportation Committee, the state can use it to sell bonds. And those bonds will allow moving already approved road projects up which are now not scheduled before January 2010.

But it wasn’t easy for some committee members to vote for tax increases, and nine didn’t: Republicans Dwight Butler, Harned; Jamie Comer, Tompkinsville; Bob DeWeese, Louisville; Danny Ford, Mt. Vernon; Marie Rader, McKee; and John Vincent, Ashland; and Democrats Royce Adams, Dry Ridge, and Rick Nelson, Middlesboro.

“None of us up here likes taxes,” said Jimmie Lee, D-Elizabethtown. “There’s a great deal of squirming going on up here when we make this vote.”

But some Republicans voted for the Democratic House plan, including Charlie Siler of Williamsburg.

“I’m one of those people who’s squirming in my seat,” Siler said, explaining his yes vote. “I told people I’d only make the right vote.” Siler said he could not vote to cut funding for the Meals on Wheels program for seniors and other programs.

“So I’m going to quit squirming and do what’s right,” Siler concluded. Moberly called Siler “one of the true statesmen of the House.”

Republicans Lonnie Napier of Lancaster and Scott Brinkman of Louisville joined Siler. Napier said he saw the need to do “everything we can to restore the cuts to higher education.”

But DeWeese and Ford complained they hadn’t seen either the revenue package or the budget before being asked to cast votes on both Tuesday. The package is entirely the work of the Democrats. Both voted for the budget, however.

Jim Wayne, D-Louisville, said advocates for social services and education need to lobby other lawmakers to pass the budget because “there is going to be political fallout from this for people who support it,” referring to lawmakers who face opponents in the primary or general elections. Some of those opponents are sure to cast those who voted for the budget as supporting higher taxes. But, Wayne said, the alternative of steep budget cuts is worse.

“We are being dead beat parents if we don’t fix this situation,” Wayne said.

Moberly, who jousted with Beshear last week over their competing revenue plans, went out of his way to commend Beshear and his staff for putting together the best budget they could with available revenues.

He said a vote for the revenue proposal was a vote for better teacher salaries, to restore cuts to universities to a “continuation level” of current funding, and for health and human services programs.



RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com.



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